Report Attock

7/31/2019 Report Attock

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ATTOCK

PETROLEUM

LIMITED


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[ANALYSIS OF FINANCIAL STAEMENT] Attock Petroleum Limited

37 Shaheed Zulfikar Ali Bhutto Institute of Science & Technology, Islamabad

ATTOCK PETROLEUM LIMITED

Attock Petroleum Limited (APL) is an associates company of Attock Oil Group of

Companies, which is the only fully vertically integrated group in Oil & Gas sector of Pakistan

involved in exploration and production, refining & marketing. The company products include

Asphalt, Furnace Oil, Light Diesel Oil, Lube Base Oil, Jute Batching Oil, Solvent Oil and

Mineral Turpentine Tar. APL corporate head office is registered in Islamabad.

Attock Petroleum Limited (APL) is the 4 th Oil Marketing Company in Pakistan to be

granted a marketing license in February 1988. Through a new entrant in the field of oil

marketing, APL has managed to establish its presence and reputation as a progressive and

dynamic organization focusing on providing quality and environment friendly petroleum

products and services in Pakistan and abroad. Its steady and substantially growing market share

and customer confidence, which it enjoy, and manifestations of APL successful policies, APL is

part of the fully integrated Oil Company of the subcontinent; APL sponsors included Pharaon

Commercial Investment Group Limited and Attock Group of Companies.

Vision: To become a world class, professionally managed, fully integrated, customer focused,

Oil Marketing Company, offering value added quality and environment friendly products and

services to its customers in Pakistan and beyond. 1

Mission: To continuously provide quality and environment friendly petroleum products and

related services to industrial, commercial and retail consumers, and exceeding their expectations

through reliability, economy and quality of products and services. We are committed to

benefiting the community and ensuring the creation of a safe, responsible and innovative

environment geared to client satisfaction, end user gratification, employees' motivation and

shareholders value.2

1http://www.apl.com.pk/

2http://www.apl.com.pk/


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Profit/Loss Statement (2007-2011)

2011 2010 2009 2008 2007

Sales127,036,966.00 94,897,866.00 70,724,427.00 60,130,125.00 49,939,190.00

Less

Sales Tax

17,642,241.00 12,105,948.00 8,861,275.00 6,887,795.00 5,808,654.00

Net Sales

109,394,725.00 82,791,918.00 61,863,152.00 53,242,330.00 44,130,536.00

Cost of Good Sold

104,680,507.00 79,032,034.00 58,570,802.00 50,493,929.00 42,085,565.00

Gross Profit

4,714,218.00 3,759,884.00 3,292,350.00 2,748,401.00 2,044,971.00Other Operating Income

1,978,931.00 1,308,904.00 843,967.00 896,359.00 406,218.00

Operating Expenses

611,315.00 480,860.00 477,069.00 372,670.00 283,284.00

Operating Profit

6,081,834.00 4,587,928.00 3,659,248.00 3,272,090.00 2,167,941.00

Financing Cost

682,666.00 319,865.00 28,992.00 - -

Income on Bank Deposit& Short Term Investment 962,838.00 980,736.00 848,852.00 381,910.00 351,747.00

Share of profit of

associates 93,211.00 42,337.00 26,510.00 58,918.00 42,319.00

Other charges

437,706.00 444,827.00 225,199.00 183,366.00 126,401.00

Profit before Taxation

6,017,511.00 4,846,309.00 4,280,419.00 3,529,552.00 2,435,606.00

Taxation

1,761,000.00 1,252,000.00 1,198,000.00 888,000.00 707,000.00

Net Profit4,256,511.00 3,594,309.00 3,082,419.00 2,641,552.00 1,728,606.00


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Balance Sheet (2007-2011)

2011 2010 2009 2008 2007

AssetNon-Current Assets

Property Plant &

Equipment 1,374,767.00 1,217,217.00 1,130,857.00 922,621.00 601,326.00

Long TermInvestment in

associated company

842,957.00 765,739.00 733,397.00 709,081.00 387,246.00

Long Term Deposits

& Prepayments 15,231.00 30,463.00

- - -

Current Assets

Stores, Spare Parts &Loose Tools 9,729.00 6,630.00 2,827.00 5,164.00

3,163.00

Stock In Trade

5,246,705.00 993,282.00 141,507.00 299,092.00 341,702.00

Trades Debt

9,297,292.00 7,602,060.00 7,835,521.00 5,825,869.00 2,502,998.00

Advance Deposit &

Other Receivable 1,459,703.00 719,904.00 993,395.00 1,303,249.00 878,498.00

Short Term

Investment 1,015,930.00 831,754.00

-

330,369.00 202,025.00

Cash & BanksBalances 5,218,037.00 9,275,603.00 7,434,910.00 6,117,891.00 4,066,809.00

Total Current

Assets 22,247,396.00 19,429,233.00 16,408,160.00 13,881,634.00 7,995,195.00

Total Assets24,480,351.00 21,442,652.00 18,272,432.00 15,513,336.00 8,983,767.00

Equity & Liabilities

Shares Capital &

Reserve

Authorized Capital

1,500,000.00 1,500,000.00 1,500,000.00 750,000.00 750,000.00

Issued Subscribed &

Paid-up Capital 691,200.00 576,000.00 576,000.00 480,000.00 400,000.00

Reserve

Special Reserves

27,407.00 17,043.00 34,097.00 53,272.00

18,004.00

Revenue Reserves


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Un Appropriate Profit10,827,601.00 8,643,534.00 6,472,171.00 5,002,577.00 3,036,293.00

Total Shareholder

Equity 11,546,208.00 9,236,577.00 7,082,268.00 5,535,849.00 3,454,297.00Non-Current

Liability

Long Term Deposits

209,316.00 178,308.00 159,538.00 121,137.00 113,821.00

Differed Income Tax

Liability 111,000.00 110,000.00 92,000.00 14,000.00

13,000.00

Total Non-Current

Liabilities 320,316.00 288,908.00 251,538.00 135,137.00 126,821.00

Current Liabilities

Trades and OtherPayable 12,073,287.00 11,554,057.00 10,730,633.00 9,813,929.00 5,296,183.00

Provisions for Income

Tax 540,540.00 363,110.00 207,993.00 28,421.00 106,466.00

Total Current

Liabilities 12,613,827.00 11,917,167.00 10,938,636.00 9,842,350.00 5,402,649.00

Total Equity &

Liability 24,480,315.00 21,442,652.00 18,272,432.00 15,513,336.00 8,983,767.00


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PL Statement Horizontal Analysis (2007-2011)

Net Sales:

0

100000000

200000000

300000000

400000000

500000000

600000000

2007 2008 2009 2010 2011

Net Sale

HA2011 HA2010 HA2009 HA2008

Sales 33.87% 34.18% 17.62% 20.41%Less

Sales Tax 45.73% 36.62% 28.65% 18.58%

Net Sales 32.13% 33.83% 16.19% 20.65%

Cost of Good Sold 32.45% 34.93% 16.00% 19.98%

Gross Profit 25.38% 14.20% 19.79% 34.40%

Other Operating Income 51.19% 55.09% -5.84% 120.66%

Operating Expenses 27.13% 0.79% 28.01% 31.55%

Operating Profit 32.56% 25.38% 11.83% 50.93%

Financing Cost 113.42% 1003.29%Income on Bank Deposit & Short Term

Investment

-1.82% 15.54% 122.26% 8.58%

Share of profit of associates 120.16% 59.70% -55.01% 39.22%

Other charges -1.60% 97.53% 22.81% 45.07%

Profit before Taxation 24.17% 13.22% 21.27% 44.91%

Taxation 40.65% 4.51% 34.91% 25.60%

Net Profit 18.42% 16.61% 16.69% 52.81%

2011 2010 2009 2008

32.13% 33.83% 16.19% 20.65%


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Gross Profit:

Profit before Taxation:

0

1000000

2000000

3000000

4000000

5000000

2007 2008 2009 2010 2011

Gross Profit

0

2000000

4000000

6000000

8000000

2007 2008 2009 2010 2011

Profit Before Taxation

2011 2010 2009 2008

25.38% 14.20% 19.79% 34.40%

2011 2010 2009 2008

24.17% 13.22% 21.27% 44.91%


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Net Profit:

0

1000000

2000000

3000000

4000000

5000000

2007 2008 2009 2010 2011

Net Income

2011 2010 2009 2008

18.42% 16.61% 16.69% 52.81%


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PL Statement Vertical Analysis (2007-2011)

VA2011 VA2010 VA2009 VA2008 VA2007

Sales 100.00% 100.00% 100.00% 100.00% 100.00%

Less

Sales Tax 13.89% 12.76% 12.53% 11.45% 11.63%

Net Sales 86.11% 87.24% 87.47% 88.55% 88.37%

Cost of Good Sold 82.40% 83.28% 82.82% 83.97% 84.27%

Gross Profit 3.71% 3.96% 4.66% 4.57% 4.09%

Other Operating Income 1.56% 1.38% 1.19% 1.49% 0.81%

Operating Expenses 0.48% 0.51% 0.67% 0.62% 0.57%

Operating Profit 4.79% 4.83% 5.17% 5.44% 4.34%Financing Cost 0.54% 0.34% 0.04% 0.00% 0.00%

Income on Bank Deposit & Short TermInvestment

0.76% 1.03% 1.20% 0.64% 0.70%

Share of profit of associates 0.07% 0.04% 0.04% 0.10% 0.08%

Other charges 0.34% 0.47% 0.32% 0.30% 0.25%

Profit before Taxation 4.74% 5.11% 6.05% 5.87% 4.88%

Taxation 1.39% 1.32% 1.69% 1.48% 1.42%

Net Profit 3.35% 3.79% 4.36% 4.39% 3.46%

Net Sales:

84

85

86

87

88

89

2007 2008 2009 2010 2011

Net Sales

2011 2010 2009 2008 2007

86.11% 87.24% 87.47% 88.55% 88.37%


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Gross Profit:

2011 2010 2009 20008 2007

3.71% 3.96% 4.66% 4.57% 4.09%

Net Income:

0

1

2

3

4

5

2007 2008 2009 2010 2011

Gross Profit

0

1

2

3

4

5

2007 2008 2009 2010 2011

Net Income

2011 2010 2009 2008 2007

3.35% 3.79% 4.36% 4.39% 3.46%


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Pl Statement Vertical Interpretation:

Net Sales are continuously getting down because of increasing in sales tax. Gross profit

margin of 2011 decrease as compared to 2010 due to decrease in sales growth and increase in

sales tax. Net income shows decrease due increase in financing cost, taxation and decrease in

income and bank deposit


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Balance Sheet Horizontal Analysis (2007-2011)

HA2011 HA2010 HA2009 HA2008

Asset

Non-Current Assets

Property Plant & Equipment 12.94% 7.64% 22.57% 53.43%

Long Term Investment in associated

company

10.08% 4.41% 3.43% 83.11%

Long Term Deposits & Prepayments -50.00% 0.00% 0.00% 0.00%

Current Assets

Stores, Spare Parts & Loose Tools 46.74% 134.52% -45.26% 63.26%

Stock In Trade 428.22% 601.93% -52.69% -12.47%

Trades Debt 22.30% -2.98% 34.50% 132.76%

Advance Deposit & Other Receivable 102.76% -27.53% -23.78% 48.35%

Short Term Investment 22.14% 0.00% -100.00%

63.53%

Cash & Banks Balances -43.74% 24.76% 21.53% 50.43%

Total Current Assets 14.50% 18.41% 18.20% 73.62%

Total Assets 14.17% 17.35% 17.79% 72.68%


Shares Capital & Reserve

Authorized Capital 0.00% 0.00% 100.00% 0.00%

Issued Subscribed & Paid-up Capital 20.00% 0.00% 20.00% 20.00%

Reserve

Special Reserves 60.81% -50.02% -35.99% 195.89%

Revenue Reserves

Un Aspirate Profit 25.27% 33.55% 29.38% 64.76%

Total Shareholder Equity 25.01% 30.42% 27.93% 60.26%

Non-Current Liability

Long Term Deposits 17.39% 11.77% 31.70% 6.43%

Deferred Income Tax Liability 0.91% 19.57% 557.14% 7.69%

Total Non-Current Liabilities 10.87% 14.86% 86.14% 6.56%

Current Liabilities

Trades and Other Payable 4.49% 7.67% 9.34% 85.30%

Provisions for Income Tax 48.86% 74.58% 631.83% -73.31%

Total Current Liabilities 5.85% 8.95% 11.14% 82.18%

Total Equity & Liability 14.17% 17.35% 17.79% 72.68%


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Non-Current Assets:

Current Assets:

0

500000

1000000

1500000

2000000

2500000

2007 2008 2009 2010 2011

Non Current Assets

-

5,000,000.00

10,000,000.00

15,000,000.00

20,000,000.00

25,000,000.00

2007 2008 2009 2010 2011

Current Assest

2011 2010 2009 2008

-26.98% 12.05% 26% 136.54%

2011 2010 2008 2007

14.50% 18.41% 18.20% 73.62%


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Liabilities:

Shareholder Equity:

2011 2010 2008 2007

25.01% 30.42% 27.93% 60.26%

-

5,000,000.00

10,000,000.00

15,000,000.00

2007 2008 2009 2010 2011

Laibilities

-

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00

12,000,000.00

2007 2008 2009 2010 2011

Shareholder Equity

2011 2010 2008 2007

16.72% 23.81% 97.28% 88.74%


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Interpretation:

Current assets increasing 2010 to 2011 due to increase inventory, trade debt and advance deposit

Non-current assets same as previous years. Shareholder equity increased due to increase in un-

appropriate profit and issued subscribes and paid up capital. Liabilities getting decrease year by

year thats a good sign for organization, this decreases happened due to trade and other payables.


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Balance Sheet Vertical Analysis (2007-2011)

VA2011 VA2010 VA2009 VA2008 VA2007Asset

Non-Current Assets

Property Plant & Equipment 5.62% 5.68% 6.19% 5.95% 6.69%

Long Term Investment in associated

company

3.44% 3.57% 4.01% 4.57% 4.31%

Long Term Deposits & Prepayments 0.06% 0.14% 0.00% 0.00% 0.00%

Current Assets

Stores, Spare Parts & Loose Tools 0.04% 0.03% 0.02% 0.03% 0.04%

Stock In Trade 21.43% 4.63% 0.77% 1.93% 3.80%Trades Debt 37.98% 35.45% 42.88% 37.55% 27.86%

Advance Deposit & Other Receivable 5.96% 3.36% 5.44% 8.40% 9.78%

Short Term Investment 4.15% 3.88% 0.00% 2.13% 2.25%

Cash & Banks Balances 21.32% 43.26% 40.69% 39.44% 45.27%

Total Current Assets 90.88% 90.61% 89.80% 89.48% 89.00%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%


Shares Capital & Reserve

Authorized Capital 6.13% 7.00% 8.21% 4.83% 8.35%Issued Subscribed & Paid-up Capital 2.82% 2.69% 3.15% 3.09% 4.45%

Reserve

Special Reserves 0.11% 0.08% 0.19% 0.34% 0.20%

Revenue Reserves 0.00% 0.00% 0.00% 0.00% 0.00%

Un Appropriate Profit 44.23% 40.31% 35.42% 32.25% 33.80%

Total Shareholder Equity 47.17% 43.08% 38.76% 35.68% 38.45%

Non-Current Liability

Long Term Deposits 0.86% 0.83% 0.87% 0.78% 1.27%

Deferred Income Tax Liability 0.45% 0.51% 0.50% 0.09% 0.14%

Total Non-Current Liabilities 1.31% 1.35% 1.38% 0.87% 1.41%

Current Liabilities

Trades and Other Payable 49.32% 53.88% 58.73% 63.26% 58.95%

Provisions for Income Tax 2.21% 1.69% 1.14% 0.18% 1.19%

Total Current Liabilities 51.53% 55.58% 59.86% 63.44% 60.14%

Total Equity & Liability 100.00% 100.00% 100.00% 100.00% 100.00%


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Non-Current Assets:

2011 2010 2009 20008 2007

9.12% 9.319% 10.02% 10.52% 11%

Current Assets:

0

2

4

6

8

10

12

2007 2008 2009 2010 2011

Non Current Assets

88

88.5

89

89.5

90

90.5

91

2007 2008 2009 2010 2011

Current Assest

2011 2010 2009 2008 2007

90.88% 90.61% 89.80% 89.48% 89.00%


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Liabilities:

Shareholder Equity:

2011 2010 2009 2008 2007

47.17% 43.08% 38.76% 35.68% 38.45%

0

10

20

30

40

50

60

70

2007 2008 2009 2010 2011

Laibilities

0

10

20

30

40

50

2007 2008 2009 2010 2011

Shareholder Equity

2011 2010 2009 2008 2007

52.84% 56.93% 61.24% 64.31% 61.55%


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RATIO ANALYSIS

1. Liquidity Ratio

2. Operating Ratio

3. Capital Structure Solvency Ratio

4. Return on Investment

5. Profitability Ratio

6. Leverages Ratio

1-Liquidity Ratio: Liquidity ratios tell us about a company ability to meet short term financial

obligations such as debt payment, payroll, and account payable

A. Current Ratio

B. Acid Test Ratio

C. Working Capital

A. Current Ratio: Measure company current assets against its current liabilities

Formula: Current Ratio = Current Assets/Current Liability

Graph:

Interpretation: It shows the company ability to pay it short term liability. From 2007 to

2011, this ratio is going upward trend, so this shows that company is in a good position to

pay its short term liability.

0

0.5

1

1.5

2

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Current Ratio

2011 2010 2009 2008 2007

1.763 1.63 1.5 1.41 1.478


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B. Acid Test Ratio: Measures a company ability to meet its current obligations quickly.

Formula: Quick Ratio = Current Asset-Inventory/Current Liability

2011 2010 2009 2008 2007

1.3477 1.547 1.487 1.38 1.42

Graph:

Interpretation: The acid test ratio of company has decreased in year 2011 as compared to year

2010. The trend of the company in its acid test ratio shows that company has a sense of

maintaining good and adequate funds for payment of short term obligation.

C. Working Capital:A measure of both a company's efficiency and its short-term financial

health

Formula = Current Asset- Current Liabilities

2011 2010 2009 2008 2007

9633569 7512066 5469534 4039284 2592546

1.3

1.35

1.4

1.45

1.5

1.55

1.6

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Acid Test Ratio


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Graph:

Interpretation: Working capital of company has a trend of increasing from a trend 2007 to

2011. This is a good sign, asset of a company increasing day by day over liability.

2- Operating Ratio/Activity Ratio: Operating Ratios help us to assess a companys level of

efficiency.

A. Average Collection Period:

B. Inventory Turnover Ratio

C. Average Payment Period:

D. Total Asset Turnover

E. Working Capital Turnover

F. Day to Sell Inventory

A. Average Collection Period: The approximate amount of time that it takes for a business to

receive payments owed, in terms of receivables, from its customers and clients

Formula: Average Account Receivable/ Sale/360

0

5000000

10000000

15000000

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Working Capital

2011 2010 2009 2008 2007

31.02 34.83 46.23 35.36 18.29


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Graph:

Interpretation: This ratio has decreased constantly from 2009 to 2011. This indicates thatmanagement of company is in action to reduce the collection period.

B. Inventory Turnover Ratio: A ratio showing how many times a company's inventory is

sold and replaced over a period

Formula: Cost of Goods Sold/ Average Inventory

2011 2010 2009 2008 2007

33.55 139.28 266.77 157.6 202.37

Graph:

Interpretation: Company inventory turnover ratio has decreased in 2010 and 2011. This

indicates that company has a problem; the management of company should take action.

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Average Collection Period (Days)

0

100

200

300

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Invntory Turnover Ratio (Times)


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C. Average Payment Period: The number of days a company takes to pay off credit

purchases

Formula: Average Account Payable/ CGS/365

2011 2010 2009 2008 2007

41 51 64 54 45

Graph:

Interpretation: Average payment period show decreasing trend from 2009 to 2011. Reason

behind this decreases in account payable as compare to cost of goods sold.

D. Total Asset Turnover: The amount of sales generated for every dollar's worth of assets

Formula: Sales/ Average Total Assets

2011 2010 2009 2008 2007

4.468 3.861 3.38 3.432 4.91

Graph:

0

20

40

60

80

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Average Payment Period (Times)

0

2

46

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Total Asset Turn Over (Times)


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Interpretation: Total asset turnover ratio has similar trend, but in 2011 turnover

increases due to increase in sale.

E. Working Capital Turn over: A measurement comparing the depletion of working capital

to the generation of sales over a given period. This provides some useful information as to

how effectively a company is using its working capital to generate sales

Formula = Sales/Average Working Capital

2011 2010 2009 2008 2007

12.76 12.75 13.011 16.05 17.022

Graph:

Interpretation: It tells us about the use of working capital, working capital turnoverdecreases year by year. This is not a good sign.

F. Day to Sell Inventory: A financial measure of a company's performance that gives

investors an idea of how long it takes a company to turn its inventory (including goods that

are work in progress, if applicable) into sales

Formula: Average Inventory/ Cost of Sale/365

0

5

10

15

20

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Working Capital Turnover

2011 2010 2009 2008 2007

18.29 4.58 0.88 2.162 2.964


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Graph:

Interpretation: It tell us how often the company places an order for inventory, when we

compare 2010 with 2011, we found that company place more order.

3-Capital Structure Solvency Ratio: Capital Structure Solvency Ratio used to determine the

relationship between a companys debt and equity as well as the comparative proportions of

different types of stock. It also addresses a companys ability to remain solvent

A. Total Debt to Equity Ratio

B. Long term Debt to Equity Ratio

C. Total Debt to Asset RatioD. Time Interest Earned

A. Total Debt to Equity Ratio:A measure of a company's financial leverage.

Formula: Total Liabilities/ Total Shareholder Equity

2011 2010 2009 2008 2007

1.12 1.32 1.58 1.8 1.6

0

5

10

15

20

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Day to Sell Inventory


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Graph:

Interpretation: Debt to equity ratio of a company decreases, which is good sign, amount

of equity in business increases year to year.

B. Long term Debt to Equity Ratio: Refers to money the company owes that it doesn't

expect to pay off in the next year

Formula: Long Term Liabilities/ Shareholder Equity

2011 2010 2009 2008 2007

0.02774 0.0312 0.0355 0.0244 0.0367

Graph:

Interpretation: From 2009 to 2011, long term debt to equity ratio shows decreasing

trend means company is not obtaining the long term loan.

0

0.5

1

1.5

2

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Total Debt to Equity Ratio

0

0.01

0.02

0.03

0.04

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Long Term Debt to Equety Ratio


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C. Total Debt to Asset Ratio: Indicates what proportion of the company's assets are being

financed through debt

Formula: Total Debt/ Total Asset

2011 2010 2009 2008 2007

52.83% 56.92% 61.20% 64.30% 61.54%

Graph:

Interpretation: Total debt to total assets ratio shows that company reduced the debt

involvement and increases the equity in business. It is a good sign.

D. Time Interest Earned: Measure a company's ability to meet its debt obligations

Formula: EBIT/ Interest Expense

0

20

40

60

80

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Total Debt to Asset Ratio

2011 2010 2009 2008 2007

9 14 126 0 0


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Graph:

Interpretation: Decrease in value due to increase in interest expense/financing cost.

4. Return on Investment: Measure used to evaluate the efficiency of an investment or to

compare the efficiency of a number of different investment

A. Return on Asset

B. Return Equity

A. Return on Asset: How profitable a company is relative to its total assets

Formula: Net Income/Average Total Assets

Graph:

Interpretation: Company maintains its ROA from 2009 to 2011 with little bit changes.

0

50

100

150

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Time Intrest Earned Ratio

16

18

20

22

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Return on Asset

2011 2010 2009 2008 2007

18.53% 18.10% 18.24% 21.56% 19.24%


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B. Return on Equity: Return on equity measures a corporations profitability by revealing

how much profit a company generates with the money shareholders have invested

Formula: Net Income/Average Shareholder Equity

2011 2010 2009 2008 2007

40.90% 44.10% 48.80% 58.70% 50.00%

Graph:

Interpretation: Return on equity is showing decreasing trends, because company was not

paying to its shareholder, company try to keep some earning in its resources.

5. Profitability Ratio: Used to assess a business's ability to generate earnings as compared to

its expenses and other relevant costs incurred during a specific period of time

A. Gross Profit Margin

B. Net Profit Margin

C. Operating Profit Margin

A. Gross Profit Margin: A financial metric used to assess a firm's financial health by

revealing the proportion of money left over from revenues after accounting for the cost of

goods sold

Formula: SaleCost of Sale/ Sale

2011 2010 2009 2008 2007

4.31% 5.00% 5.32% 5.16% 4.63%

0

20

40

60

80

2006 2007 2008 2009 2010 2011 2012

Ra

tio

Year

Return on Equity


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Graph:

Interpretation: Gross profit margin decreases from prior years due to increasing of cost ofgoods sold.

B. Net Profit Margin: Net profit divided by net revenues, often expressed as a percentage.

This number is an indication of how effective a company is at cost control.

Formula: Net Profit /Net Sale

Graph:

Interpretation: Net profit ratio shows decreasing trend from 2009 to 2011. The decreases in

value are due to increases in operating expenses.

0

2

4

6

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Gross Profit Margin

0

1

2

3

4

5

6

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Net Profit Margin

2011 2010 2009 2008 2007

3.89% 4.34% 4.98% 4.96% 3.92%


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C. Operating Profit Margin: A ratio used to measure a company's pricing strategy and

operating efficiency

Formula: EBIT/Sale

Graph:

Interpretation: Operating profit margin of company is showing up and down trend with

slight margin. In 2011 Attock Petroleum Limited should maintain their operating profit

margin.

6. Market Measures:

B. Earning Per Share

C. Price Earning Ratio

D. Dividend Payout Ratio

A. Earning Per Share: The portion of a company's profit allocated to each outstanding share

of common stock

Formula: EACS/Number of Share Outstanding

2011 2010 2009 2008 2007

61.58 62.4 53.51 55.03 43.22

0

2

4

6

8

2006 2007 2008 2009 2010 2011 2012

R

atio

Year

Operating Profit Mrgin

2011 2010 2009 2008 2007

5.56% 5.54% 5.92% 6.15% 4.91%


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Graph:

Interpretation: EPS shows increasing trend from 2007 to 2010 year, but in year 2011 earning

per share little bit decreases due to increase operating expenses, financing cost and current

taxation. Earning per share previously reported at Rs. 62.40 in the financial statement for the

year ended June 30, 2010 has been restated to Rs. 52.00 for 11520000 bonus share issued during

year ended June 30 2011.

C. Price Earning Ratio: A valuation ratio of a company's current share price compared to its

per-share earnings

Formula: Market Price Per Share/Earning Per Share

Graph:

0

10

20

30

40

50

60

70

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Earining per Share

0

5

10

15

2006 2007 2008 2009 2010 2011 2012

Ratio

Year

Price Earing Ratio

2011 2010 2009 2008 2007

6.75 5.19 5.94 9.43 13.92


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Interpretation: Here price earning ratio is 13.92 in 2007 while it is 6.75 in 2011 that

keep on deceasing is a good sign.

Altman Z Score:

Definition: The Z-score formula may be used to predict the probability that a firm will go into

bankruptcy within two years.

The Z score consists of 5 variables:

X1 = Working Capital/Total Assets

X2 = Retained Earnings/Total Assets

X3 = EBITDA/Total Assets

X4 = Market Value of Equity/Total Liabilities X5 = Net Sales/Total Assets

Altman Z Score for Public Companies:

The original model to calculate the Z score for public manufacturing companies is as follows.

Z = 1.2*X1 + 1.4*X2 + 3.3*X3 + 0.6*X4 + 1.0*X5

When Z is 3.0 or more, the firm is most likely safe based on the financial data. However,be careful to double check as fraud, economic downturns and other factors could cause

unexpected reversals. When Z is 2.7 to 3.0, the company is probably safe from bankruptcy, but this is in the

grey area and caution should be taken.

When Z is 1.8 to 2.7, the company is likely to be bankrupt within 2 years. This is the

lower portion of the grey area and a dramatic turnaround of the company is needed.

When Z is below 1.8, the company is highly likely to be bankrupt. If a company isgenerating lower than 1.8, serious studies must be performed to ensure the company cansurvive.

Attock Petroleum Limited: Altman Z score for year 2011 is 7.4; the probability of insolvencyis low. The firm is most likely safe based on the financial data. . However, be careful to double

check as fraud, economic downturns and other factors could cause unexpected reversals.

Report Attock

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